London Stock Exchange rejects Hong Kong takeover approach – business live

Rolling coverage of the latest economic and financial news, the LSE rejects proposed merger with HKEX

• Latest: LSE rejects Hong Kong's approach
• China drops some tariffs on pork and soybeans
• Introduction: ECB's stimulus package lifts markets
• But Austria thinks it's a mistake
• Bild: Dracula Draghi strikes again

4.58pm BST

Finally, the FTSE 100 has extended its recent gains, closing 22 points higher at 7,367, up 0.3%.

The London Stock Exchange was among the top risers, up 3.6% at 75.14.

3.44pm BST

Time for a quick recap:

3.35pm BST

Newsflash: The Hong Kong Exchanges and Clearing has responded to the LSE's rebuttal - and is refusing to go away quietly.

HKEX says it is disappointed that its London rival won't "properly engage".

The Board of HKEX continues to believe that the proposed combination with LSEG represents a highly compelling strategic opportunity to create a global market infrastructure leader.

3.23pm BST

This is interesting.....

This chart from the @UMich survey caught my eye: a big chunk of consumers expect rate cuts next year. Will the Fed deliver? pic.twitter.com/EYkdD62qrq

3.11pm BST

Despite recession fears, and the US China trade war, American consumer confidence has gone up!

The Michigan Consumer Sentiment index, just released, has risen to 92.0 for September, beating August's 89.8. That's also better than the 90.9 which Wall Street expected.

BREAKING! US consumer confidence rebounds, but only a bit. pic.twitter.com/rJh49VZU91

Umich Consumer Sentiment 92 vs 91 Above Expectations as well... Eco-Ticians' and Recessionists' get it wrong once again...

3.06pm BST

The US stock market has made a muted start to the final trading day of the week.

2.53pm BST

Here's our news story on the LSE-HKEX (non) merger:

Related: London Stock Exchange rejects approach by Hong Kong counterpart

2.47pm BST

Zimbabwe's eye-watering interest rate hike, from 50% to 70%, is presumably an attempt to calm its inflation rate, which is acceleratingly alarmingly.

According to official data, Zimbabwe's inflation rate almost doubled in July, to 175% year-on-year. Unofficial estimates suggest it is much higher, as shortages of food and fuel leave citizens facing sharply higher prices every day.

2.35pm BST

Now this is a rate hike:

*ZIMBABWE RAISES BENCHMARK INTEREST RATE TO 70% FROM 50%

2.04pm BST

Here's Roger Barron, M&A Partner at law firm Paul Hastings, on the London Stock Exchange's move:

"It's unsurprising that they have rejected this approach as the fact it was unsolicited means that the bidder must have known it wouldn't have been popular - if it had they would have tried to agree a recommended bid and maintain confidentiality.

It's perhaps also surprising that they didn't make this announcement sooner."

1.50pm BST

The LSE's firm rejection of HKEX's takeover approach isn't a surprise, says Neil Wilson of Markets.com.

He writes:

Unattractive, offering a puny dowry and coming with volatile and unpredictable parents, HKEX never looked like the ideal bride. No great surprise to see the LSEG board has politely but firmly rejected the HKEX bid.

The letter to HKEX is not full of praise. In fact the letter from chairman Don Robert scolds HKEX for making public the highly speculative bid only days after telling LSEG.

The question now is whether the Americans come in with a counter offer. Shares are holding around the 73 level, suggesting there could be some interest. A knockout premium would be the price, but as we saw with Sky/Comcast, it's not that far-fetched if the prize is deemed of enough strategic importance.

1.06pm BST

The LSE has also sent a blisteringly critical letter to the HKEX, explaining why its approach has been soundly rejected.

And they've released it to the City.

We were very surprised and disappointed that you decided to publish your unsolicited proposal within two days of our receiving it.

The high geographic concentration and heavy exposure to market transaction volumes in your business would represent a significant backward step for LSEG strategically.

Your proposal would be subject to full scrutiny from a number of financial regulators, as well as governmental entities under, for example, the UK Enterprise Act, the CFIUS process in the US, and the 'golden powers' regime in Italy. There is no doubt that your unusual Board structure and your relationship with the Hong Kong government will complicate matters.

We see the value of your share consideration as inherently uncertain. The ongoing situation in Hong Kong adds to this uncertainty.

Taking all of these factors into account, the Board unanimously rejects your proposal. Given the fundamental flaws in your proposal, we see no merit in further engagement.

12.31pm BST

Newsflash: The London Stock Exchange has just roundly rejected the takeover proposal from its Hong Kong rival.

Further to the announcement on 11 September 2019, the Board of London Stock Exchange Group plc ("LSEG"), together with its financial and legal advisers, has now considered the unsolicited, preliminary and highly conditional proposal from Hong Kong Exchanges and Clearing Limited ("HKEX") to acquire the entire share capital of LSEG (the "Conditional Proposal").

The Board has fundamental concerns about the key aspects of the Conditional Proposal: strategy, deliverability, form of consideration and value. Accordingly, the Board unanimously rejects the Conditional Proposal and, given its fundamental flaws, sees no merit in further engagement.

12.26pm BST

Nick Marro, Global Trade Lead at The Economist Intelligence Unit, says China's decision is a clear sign of goodwill.

He believes that dropping the new tariffs on pork and soybeans could help deliver progress at the US-China talks next month. But a full trade deal still looks a long way away.

11.55am BST

Some important news is coming out of China on the trade war.

"China supports relevant enterprises buying certain amounts of soybeans, pork and other agricultural products from today in accordance with market principles and WTO rules."

#BREAKING China to exempt US pork and soybeans from added tariffs: Xinhua pic.twitter.com/LQQtBLNqJW

"We don't want a trip that's just a series of discussions. We want to make meaningful progress.

10.40am BST

Wow. The pound has now gained nearly one and a half cents against the US dollar this morning, to a seven-week high of $1.2465.

This means it's gained five whole cents since hitting a three-year low at the start of September.

Sterling has rallied to its highest levels against the euro and dollar since late-July this morning, having gained more than 1% in reaction to the news that the DUP may be softening their stance on the Irish backstop.

However, the pound remains vulnerable, with politics set to continue dominating and the Brexit landscape shifting as quickly as ever.

#Forex - #pound above 1.24 against #dollar having neared $1.20 during August. Also hit 2.5-month high against #euro (1.125/) in immediate aftermath of #ECB stimulus. #Sterling hits highest level since July as no-deal #Brexit fears ebb https://t.co/MKpRFJb06D via @financialtimes

10.18am BST

The strength of the pound is pulling the FTSE 100 down this morning. It's lost 22 points or 0.3%, because a stronger sterling hurts multinationals' overseas earnings.

But otherwise, now could be a good time to buy UK shares, according to analysts at Credit Suisse.

"Given the most recent developments (...), we believe that investors should now be overweight of the UK, but more importantly in US dollar terms and still selectively.

"We would buy UK international earners in dollar terms that are cheap versus their peer group."

Sterling soaring. #Cable through $1.2450#GBP +0.63% against other currencies#GBPUSD 1.24456 +0.91%#EURGBP 0.89118 -0.65%#GBPAUD 1.81018 +0.78%#GBPJPY 134.466 +0.84%#GBPCAD 1.64618 +1.04%#GBPCHF 1.22955 +0.65%#GBPEUR 1.12212 +0.66%

9.29am BST

The pound has hit its highest level since late July this morning, on growing optimism that a no-deal Brexit can be avoided.

Sterling has jumped by three-quarters of a cent to $1.2406, a seven-week high.

Friday's front page:
- DUP opens door to new Brexit deal for Johnson
- New FGM law is racially motivated, Holyrood told #scotpapers #tomorrowspaperstoday pic.twitter.com/c1iNdlMWB2

UK must leave as one nation. We are keen to see a sensible deal but not one that divides the internal market of the UK. We will not support any arrangements that create a barrier to East West trade. Anonymous sources lead to nonsense stories. #frontpages

Related: Brexit: DUP denies softening position on Irish backstop - live news

9.07am BST

European bank stocks are rising this morning, lifted by the ECB's new stimulus package.

Financial companies are the top risers on the Stoxx 600, up 0.8% on average. This backs up the argument that the new two-tiered system for negative rates, and the more generous TLTRO loans programme, will help the banks.

8.50am BST

Mark Haefele, chief investment officer at UBS Global Wealth Management, also has doubts about the ECB's firepower.

The ECB has committed to keeping rates at current levels or lower until it sustainably achieves its inflation target. But the effectiveness of forward guidance rests on central bank credibility. The ECB's inability to achieve its inflation target a decade after the global financial crisis may undermine its credibility."

8.42am BST

Kit Juckes of Socii(C)ti(C) Gi(C)ni(C)rale writes that Mario Draghi is going out swinging, but perhaps not connecting as he used to:

Mario Draghi reminds me of an ageing boxer, still up for the fight but unable to pack the same punch as he used to. The currency fell yesterday on the news of a rate cut and an open-ended bond-buying programme, but it's clear that it isn't open ended unless the ECB can widen the pool of bonds they buy.

It's not at all clear that the impact on the economy will be significant and it's crystal clear that the baton needs to be handed to fiscal policy sharpish.

8.18am BST

German newspapers are horrified that the European Central Bank is launching a new stimulus programme.

Bild, the tabloid, has dubbed Draghi a 'dracula' who has sucked billions of euros from thrifty German savers (they claim).

The horror for German savers continues: ECB chief Mario Draghi (72) wants to tighten the zero interest rate policy even more!

The German and Dutch media are taking yesterday's announcement by the ECB well. pic.twitter.com/XeRQqod551

Don't tell them that open-ended QE is far more aggressive than a 10bp rate cut.

But tell them that under the ECB's two-tier system, German banks will save up to a1bn a year relative to the situation before the rate cut. Germany is the big winner! https://t.co/LoQcQALRIL

8.11am BST

Boom! The newest member of the ECB's governing council has gone public with his concerns over Draghi's stimulus package.

Essentially it was the question about how effective will a new monetary easing be.

"As things change -- also this forward guidance and the policy may change -- not tomorrow, not the day after tomorrow, but I wouldn't think it's there for the next decades.

7.50am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Related: ECB announces fresh stimulus as eurozone economy falters

European Opening Calls:#FTSE 7362 +0.23%#DAX 12427 +0.13%#CAC 5646 +0.06%#MIB 22151 +0.31%#IBEX 9088 +0.06%#STOXX 3541 +0.06%

Those three governors alone represent roughly half of the euro region as measured by economic output and population.

Other dissenters included, but weren't limited, to their colleagues from Austria and Estonia, as well as members on the ECB's Executive Board including Sabine Lautenschlaeger and the markets chief, Benoit Coeure, the officials said.

It is high time for fiscal policy to take charge.

Danske Daily: ECB delivered a big package https://t.co/SLNJ7ruyq3 pic.twitter.com/PupcSjgpd0